Buyer II

BUYER INFORMATION

540 S. York Rd. Elmhurst, IL 60126

Phone: (630) 617-6025 Fax: (866) 645-9528

e-mail: Pthies@Koenigstrey.com

Patrick Thies

What is the difference between a House, Townhouse, Condominium and a Co-Op?

House

When most of us talk about a house, we are referring to a free-standing single-family residence. There is also such a thing as a duplex house a free standing structure divided into two, connected, single-family units.

The main defining characteristic of a house, besides its free-standing nature, is the breadth of ownership responsibility taken on by the buyer. The owner of a house owns the building itself, as well as the land, and is responsible for all upkeep associated with those areas, including lawn and landscaping maintenance, painting, repairs and real estate taxes.

Sometimes, houses may be grouped together in a definite community that has shared spaces, such as a pool or playground. These home owners pay a fee to a home owners' association, which maintains the shared spaces and may provide such services as lawn care, landscaping, and security. The home owners' association sets the rules and regulations for the community, some even pertaining to the aesthetic appearance of the houses.

Townhouse

A townhouse is like a house in that the owner owns both the structure and the land on which it sits; but it is not free standing, so "the land on which it sits" is limited to the front and back yards. Townhouses are connected to one another in a row, and are usually two or three stories tall. They share many of the characteristics of condominiums.

Condominium

Like townhouses, condominiums are attached to one another. If you own a condo, you do not own the land surrounding your living space. A condo owner owns only the unit itself, which is taxed as an individual entity, and sometimes a percentage of the common areas of the community. Condo communities may provide such shared facilities as a pool, gym, tennis courts and clubhouse, all maintained by the condo association, which takes care of all day-to-day management tasks. This is one of the key advantages of condo living...all the joy of using the amenities, none of the hassles of maintaining them. Condominium owners pay a monthly fee to the condo association, which also sets the rules for the community.

Cooperative (Co-Op)

The main difference between condominiums and cooperatives lies in the specifics of ownership. If you own a co-op, you do not own the unit itself. Instead, you buy shares in the cooperative corporation. These shares give you sole right to your living space, but it does not give you ownership of it. For this reason, your real estate taxes may be covered by your co-op membership, because the building is taxed as a whole. Co-op members pay a monthly fee to the corporation, which, like the condo association, maintains the building and all share spaces and handles daily management tasks. A co-op is generally stricter about screening prospective buyers and has more say in the handling of your own unit. Also, a co-op may be more difficult to finance than a condominium, because co-op corporations may only deal with certain banks.

Types of loans

Fixed-Rate Mortgages-offer the same interest rate and monthly payments throughout the entire life of the loan. Typically fixed-rate mortgages offer 10, 15, 20, 25, 30 or 40 year terms.

Adjustable Rate Mortgages-also called ARMs, provide an initial fixed-rate period followed by an interest rate and payment that periodically adjusts based on the current interest rate environment. ARMs are offered for fixed periods of one, three, five or seven years.

What will a lender require from me to obtain a mortgage loan?

Information needed for a loan application: